Sun and Moon Corporations each have only one class of stock outstanding.Their stock ownership is shown below. \[\begin{array} { | c | c | c | } \hline \text { Shareholder } & \text { Sun Corporation } & \text { Moon Corporation } \\ \hline \text { Arthur } & 50 \% & 60 \% \\ \text { Brenda } & 20 \% & 40 \% \\ \text { Charles } & 30 \% & 0 \% \\ \text { David } & 0 \% & 0 \% \\ \hline \end{array}\] Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50%-80% requirements? (Assume the two corporations are equally valued.)

A) No stock ownership change is required. B) Charles must acquire an additional 10% of Moon Corporation. C) Charles must acquire an additional 5% of Sun Corporation. D) Arthur must acquire an additional 30% of Moon Corporation. A) No stock ownership change is required. B) Charles must acquire an additional 10% of Moon Corporation. C) Charles must acquire an additional 5% of Sun Corporation. D) Arthur must acquire an additional 30% of Moon Corporation. B

Green Corporation is incorporated on March 1 and begins business on June 1.Green's first tax year ends on October 31,i.e.,a short year.Green incurs the following expenses during the year: \[\begin{array} { | l | l | r | } \hline { \text { Month } } & { \text { Type } } & \text { Amount } \\ \hline \text { February } & \text { Draft charter } & \$ 2,000 \\ \cline { 2 - 3 } \text { March } & \text { Stock commission } & 30,000 \\ \text { March } & \text { Accounting feesto set up books } & 2,000 \\ \cline { 2 - 3 } \text { April } & \text { Temporary director fees } & 2,000 \\ \text { December } & \text { Charter modification fee } & 1,000 \\ \hline \end{array}\] What is the deduction for organizational expenses if Green chooses to deduct its costs as soon as possible?

A) $36,000 B) $5,028 C) $667 D) $500 A) $36,000 B) $5,028 C) $667 D) $500 B

Grant Corporation is not a large corporation for estimated tax purposes and reports on a calendar-year basis.Grant expects the following results: \[\begin{array} { | l | r | } \hline \text { Regular tax } & \$ 248,000 \\ \hline \text { Alternative minimum tax } & \underline { 40,000 } \\ \hline \text { Total tax due } & \$ 288,000 \\ \hline \end{array}\] Grant's tax liability for last year was $240,000.Grant's minimum total estimated tax payment for this year to avoid a penalty is

A) $240,000. B) $248,000. C) $288,000. D) $280,000. A) $240,000. B) $248,000. C) $288,000. D) $280,000.

Winter Corporation's taxable income is $500,000.In addition,Winter has the following items: \[\begin{array} { | l | r | } \hline \text { Depreciation for tax purposes } & \$ 60,000 \\ \hline \text { Depreciation for financial accounting } & \\ \text { purposes } & 40,000 \\ \hline \text { Net capital loss } & ( 2,000 ) \\ \hline \text { Interest on loan to acquire tax-exempt } & \\ \text { securities } &7,000 \\ \hline \end{array}\] What is Winter's financial accounting income?

A) $511,000 B) $513,000 C) $518,000 D) $520,000 A) $511,000 B) $513,000 C) $518,000 D) $520,000

Sun and Moon Corporations each have only one class of stock outstanding.Their stock ownership is shown below. \[\begin{array} { | c | c | c | } \hline \text { Shareholder } & \text { Sun Corporation } & \text { Moon Corporation } \\ \hline \text { Arthur } & 50 \% & 60 \% \\ \text { Brenda } & 20 \% & 40 \% \\ \text { Charles } & 30 \% & 0 \% \\ \text { David } & 0 \% & 0 \% \\ \hline \end{array}\] Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50% requirements? (Assume the two corporations are equally valued.)

A) No stock ownership change is required. B) Arthur sells 4/5ths of his shares in Sun to David. C) Arthur sells his 2/3rds of his shares to David. D) Arthur must acquire an additional 30% of Moon Corporation. A) No stock ownership change is required. B) Arthur sells 4/5ths of his shares in Sun to David. C) Arthur sells his 2/3rds of his shares to David. D) Arthur must acquire an additional 30% of Moon Corporation.